Posted in CoronavirusOn April 6, 2020, the California State Judicial Council adopted Emergency Rule 9 in response to the COVID-19 pandemic.[1] As originally approved, the rule tolled the statute of limitations for all civil causes of action from April 6, 2020 until 90 days after the Governor lifts the current State of Emergency Declaration related to the COVID-19 pandemic.
MAY 8, 2020 – UPDATE: The final version of the New Ordinance has been signed by Mayor Gracetti and takes effect May 12, 2020.
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California Senate Bill (“SB”) 899, introduced in March by Senator Scott Wiener and currently in the Senate Housing, Environmental Quality, and Governance and Finance Committees, would exempt eligible affordable housing projects and mixed use projects on property owned by religious institutions and nonprofit medical facilities from review under the California Environmental Quality Act (Pub. Res. Code § 21000 et seq.) (“CEQA”) and provide for other permit streamlining. Eligible entities include nonprofit hospitals, diagnostic or treatment centers, rehabilitation facilities, and nursing homes, as well as religious institutions. As Senator Wiener noted, “religious and charitable institutions often have land to spare, and they should be able to use that land to build affordable housing and thus further their mission. SB 899 ensures that affordable housing can be built and removes local zoning and approval obstacles in order to do so.” These eligible organizations may partner with a qualified nonprofit developer or local public entity to construct the affordable housing developments. Continue Reading
Posted in CoronavirusOn a unanimous vote yesterday, May 6, 2020, the Los Angeles City Council passed an ordinance (“New Ordinance“) amending rules in the Los Angeles Municipal Code that temporarily prohibit the eviction of residential and commercial tenants in the City of Los Angeles for failure to pay rent due to COVID-19. Notably, the New Ordinance would extend the prohibition period on evictions. The original period was previously limited to the local emergency period as declared by Mayor Eric Garcetti. For residential tenants, the new prohibition period would extend to include the “Local Emergency Period” plus 12 months after the end of such period. And for commercial tenants the new period prohibiting evictions would extend through the Local Emergency Period plus 3 months after the end of the emergency period. Please note that the final version of the New Ordinance was not available with the Council Clerk file as of the time of publication given that the ordinance was the subject of several amendments as it was considered by Council during yesterday’s virtual hearing that went into the evening. Also, these amendments will not take effect until Mayor Garcetti signs the New Ordinance, which is expected to be completed in short order. Continue Reading
Posted in CoronavirusIn an earlier post, we covered the local Shelter-in-Place (“SIP”) orders, which severely restricted construction activities throughout the Bay Area. This week the participating jurisdictions (Alameda, Contra Costa, Marin, San Francisco, San Mateo, and Santa Clara Counties) updated their SIP orders to ease restrictions on construction. The changes took effect May 4 and will continue through May 31, unless further modified.
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On April 23, 2020, California Governor Gavin Newsom issued Executive Order N-54-20 (EO) which, in part, addresses an outstanding question related to the California Environmental Quality Act’s (CEQA) “public review” requirements, which quickly became problematic upon closure of the locations typically used to house and post CEQA-related documents. These closures, which impact government buildings like the County Recorder’s Office, are just one of the many consequences of the COVID-19 pandemic and resultant stay-at-home orders issued in an attempt to safeguard the public and flatten the curve. Under this EO, while the time periods for public review remain the same, all requirements related to public filing, posting, notice, and public access to draft and final documents set forth in CEQA and the CEQA Guidelines, are exempted and suspended for the next 60 days (until June 22nd), including the Notice of Preparation, Notice of Comment Period, Notice of Intent to Adopt an EIR, Negative Declaration/Mitigated Negative Declaration, Notice of Determination and Notice of Exemption[1] so long as certain substitute procedures are followed. Continue Reading
Posted in EnvironmentalThe Clean Water Act sometimes requires a permit for the indirect discharge of pollutants from a point source to navigable waters, but only when the discharge is the “functional equivalent” of a direct discharge, the Supreme Court held on April 23. The Court’s 6-3 opinion in County of Maui v. Hawaii Wildlife Fund (No. 18-260) addresses a circuit split regarding whether indirect discharges to navigable water via groundwater are subject to the Act’s National Pollutant Discharge Elimination System (“NPDES”) permitting program, but it has implications for other types of indirect discharges as well. Although the Court identified some factors that may help determine when a discharge is the functional equivalent of a direct discharge—especially the time and distance between the discharge of a pollutant from a point source and the pollutant’s arrival in navigable waters—its opinion is likely to create substantial uncertainty for the regulated community as the Environmental Protection Agency (“EPA”), litigants, and the courts attempt to apply the Court’s multi-factor test to a variety of factual scenarios. Continue Reading
Posted in EnergyThe Federal Energy Regulatory Commission (“FERC” or “Commission”) issued on April 16, 2020 two orders[1] largely denying requests for rehearing of its prior decisions that, among other things, subjected to minimum offer price thresholds energy resources participating in PJM Interconnection, L.L.C.’s (“PJM”) capacity market which receive so-called “State Subsidies”.[2] FERC reaffirmed that a resource within broadly-defined categories (e.g., renewable resources) receiving State Subsidies must offer capacity in PJM’s forward capacity market at or above an administratively-established price floor (i.e., the minimum offer price rule, or “MOPR”), regardless of such a resource’s actual incremental costs. Potential and likely ramifications of the Commission’s actions, arguments opponents of the April 16 Orders are likely to raise and potential paths forward for industry market participants are set forth below. Additionally, the most promising arguments that could be used to invalidate the April 16 Orders, some of which are discussed below, have not been raised before or addressed by FERC. Continue Reading
Posted in CoronavirusOn April 10, 2020, the U.S. Environmental Protection Agency (EPA) issued Interim Guidance regarding EPA decision-making with respect to the potential impacts of the current novel coronavirus (COVID-19) pandemic on field work at certain cleanup sites. The Interim Guidance, which “supplements” a March 19 EPA guidance, applies to all contaminated sites where EPA is the lead agency or has direct oversight or responsibility, affecting various regulatory programs that were excluded from EPA’s March 26 COVID-19 Enforcement Discretion Memo, including hazardous waste cleanups under CERCLA and RCRA, among others. This is an interim guidance, and EPA has made it clear that it will “update this guidance as the current situation evolves.” Continue Reading
Posted in Coronavirus, TaxOn April 9, 2020, the IRS issued Notice 2020-23 (the “Notice”) which expands the filing and payment deadline relief announced by the Internal Revenue Service (“IRS”) in March. The March announcement gave taxpayers until July 15, 2020 to file their federal income tax returns and to pay federal income taxes, each of which were originally due on April 15, 2020. The Notice extends additional key tax deadlines for individuals and businesses including certain deadlines applicable to taxpayers engaging in time-sensitive deferred like-kind exchanges. Continue Reading
Posted in EnergyMembers of the Sheppard Mullin Energy, Infrastructure and Project Finance Team wrote an article published in the March 16, 2020 edition of Tax Notes Federal regarding the practical impacts on tax equity financing for renewable energy projects of a private letter ruling (“PLR”) published by the IRS in late 2019. The PLR addressed normalization and loss disallowance rules applicable to public utilities. These rules have posed significant challenges to public utilities that want to own renewable energy generation facilities, make efficient use of the tax benefits they provide (via the tax equity market) and recover their costs from ratepayers. Continue Reading
